The International Monetary Fund says its executive board has approved a four-year $US15.6 billion ($A23.3 billion) loan program for Ukraine - part of a global $US115 billion ($A172 billion) package to support the country's economy as it battles Russia's invasion.
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The decision clears the way for an immediate disbursement of about $US2.7 billion ($A4.0 billion) to Kyiv and requires ambitious reforms of Ukrainian officials, especially in the energy sector, the fund said in a statement.
The Extended Fund Facility (EFF) loan is the first major conventional financing program approved by the IMF for a country involved in a large-scale war.
The size of the overall package is meant to signal the global community's commitment to continue supporting Ukraine in the war, sources said.
Ukraine's previous, $US5 billion ($A7.5 billion) long-term IMF program was cancelled in March 2022 when the fund provided $US1.4 billion ($A2.1 billion) in emergency financing with few conditions.
It provided another $US1.3 billion ($A1.9 billion) under a "food shock window" program last October.
The latest loan is expected to unlock about $US100 billion ($A150 billion) worth of additional international support for Ukraine.
An IMF official said the $US115 billion ($A172 billion) package includes the IMF loan, $US80 billion ($A120 billion) in pledges for grants and concessional loans from multilateral institutions and other countries, and $US20 billion ($A30 billion) worth of debt relief commitments.
Ukraine must meet certain conditions during the next two years, including avoiding steps that could erode tax revenue, keeping adequate foreign exchange reserves to maintain exchange rate stability, promoting central bank independence and strengthening anti-corruption efforts.
Deeper reforms will be required in the second phase of the program to enhance stability and early post-war reconstruction, return to pre-war fiscal and monetary policy frameworks, boost competitiveness and address energy sector vulnerabilities, the IMF said.
IMF first deputy managing director Gita Gopinath said the program faced "exceptionally high" risks, and its success depended on the size, composition and timing of external financing to help close fiscal and external financing gaps and restore Ukraine's debt sustainability.
"Russia's invasion of Ukraine continues to have a devastating economic and social impact," she said, lauding Ukrainian authorities for maintaining "overall macroeconomic and financial stability".
The decision formalises an IMF staff-level agreement reached with Ukraine on March 21 that takes into consideration Ukraine's path to accession to the European Union after the war.
Ukrainian President Volodymyr Zelenskiy welcomed the new funding.
"It is an important help in our fight against Russian aggression," he said on Twitter.
"Together we support the Ukrainian economy. And we are moving forward to victory!"
IMF official Gavin Gray told reporters the fund's baseline scenario assumed the war would wind down in mid-2024, resulting in the projected financing gap of $US115 billion ($A172 billion), which would be covered by multilateral and bilateral donors and creditors.
The fund's "downside scenario" forecasts the war continuing through the end of 2025, opening a much larger $US140 billion ($A209 billion) financing gap that would require donors to dig deeper, he said.
Australian Associated Press
